tv [untitled] September 10, 2011 10:31pm-11:01pm EDT
keyser this is the kaiser report reporting of the global financial war that's raging in country after country let's bring in stuart max i think you're referring to the currency war that we've been warning about for years now first headline global currency war takes a dramatic twist now this is of course the currency war relating to the swiss franc when they've abandoned the floating exchange rate but in this article is an important quote from david bloom of h.s.b.c. that i want to refer to max gold is the only safe haven asset that will not do q e putting capital controls or complain well stay you got this global game of musical chairs or as i like to think of it past
a very made money is seeking safe harbor and they're moving to currencies that have the perception of being safe harbors like the swiss franc but now that's no longer a safe harbor so money is being driven into the norwegian krone and to some extent the australian dollar and maybe a little into the canadian dollar but those currencies too will collapse all three of currencies will collapse now all this is going on the various bodies that regulate oversee the trading of gold and silver keep raising the marginal cormorants they are in effect creating a de facto gold standard by trying to stop the creation of a defacto global gold standard but the reason why we were able to predict this is because history always rhymes and as we said this is the biggest financial catastrophe since the great depression and we know exactly what happened in the great to. russian is after
a few years of market collapse there was of course global currency war that's right but during the currency war of that era of course the world still had a gold standard and then we're not on a gold standard so the currency war takes on a dimension of lunacy speaking of three ring circus and i want to bring your attention to nigeria deals the dollar another blow so this is happened the same day actually that the swiss. introduce this currency pegged to the euro so this didn't get much attention but on september sixth nigeria's central bank transferred a tenth of its thirty three billion dollars a foreign exchange holding into yuan that's right all of the bilateral deals between russia iran china nigeria who nigeria oh yeah they're doing a deal on bilateral outside of the dollar and the dude responsible like this big banker did he says we don't need no stinking dollars well let's turn to
a clip here with reuters and where he explains why they've done that strategically we think it's inevitable that the world to recognize r. and b. a series of currency. i don't know how long beach will take but china is the second largest economy in the world it's got. a very huge amount of reserves it's in a very strong financial position. it's the large economies and it's more in this in the same situation the united states was enough to the second world war when the large economies swear. by fiscal deficit position so we do think. it is a wise move at this point in time will be the reserve currency but we've known this now for a few years and china is just playing a cat and mouse game with the dollar they are secretly hoarding gold we know this
from wiki leaks cable recently that just came out they have been secretly hoarding gold they have their minions all over the world sucking gold out of every little orifice of the global economy that they possibly can and they need another three or four or five thousand tons of gold yeah and again this is part of that trend which we've talked about it's just the currency volatility the financial volatility is we're seeing the collapse of the american empire but let's turn to this other. because this is very important. to me and you know these are decisions one of the moments. invoicing told the sun we get paid into all the reserves so for example you feel the ministry of finance has no objections we could request it also has to china paid for in r. and b. now that the chinese government allowed r. and b. for such moment for such transactions so max what do you think of this if it
because this is always the this is the thing backing the us dollar the only thing back in the u.s. dollar at this point is loyal so what do you think will happen if if nigeria starts trading a new one well this is that while we've talked to economists like michael hudson or catherine austin fitts they say what backs the dollars war and war of an oil are para pursue so to speak so yes as the warfare state of america collapses then that puts additional pressure downward pressure on the dollar it's holding up relatively well and my theory there is that ninety percent of the dollar buying is done through high frequency trading algorithmic trading computer training and this is all done really through the shadow banking system and this is why the u.s. death keeps pulling off balance sheets of the hundreds of trillions of dollars because they're out there supporting the dollar into also time as they can support the dollar anymore and then you have an enron implosion like situation and
hyperinflation overnight and people will wall. up and paul krugman of the new york times will be like who would do so though good. well john foley of reuters says that despite nigeria's bold move china's currency still has few of the qualities of a credible reserve currency and here are two of the qualities he says are necessary for a reserve currency one low inflation is usually a prerequisite yet china's runs at above six percent. i want to turn our attention to shadowstats inflation numbers and as you can see the red line is the official number so it's always well below six percent of course but the blue number up there is that based on how the u.s. used to calculate consumer price inflation before in one nine hundred ninety when then president clinton came in and manipulated it but as you see right before the financial collapse inflation in the u.s. was almost fifteen percent right so inflation in the u.s. is well above six percent so that argument doesn't hold water that's exactly
correct and then he says stable monetary policy is another typical condition yet china lacks an independent central bank so you know again referring to that chart on the left hand side of the inflation in the u.s. you saw that inflation was fifteen percent in one nine hundred eighty until paul volcker raised interest rates to twenty percent crashing inflation back down to closer to zero percent now this is what paul volcker says about what central banks add to stability of a monetary system it is a sobering fact that the prominence of central banks in this century has coincided with a general tendency towards more inflation not less if the overriding objective is price stability we did better with a nineteenth century gold standard and passive central banks with currency boards or even with free banking the federal reserve bank and in the u.s. is not independent by any stretch of the imagination and no independent body would
independently suck up two point five trillion a toxic debts from wall street that's what an independent thinking fed would do there in the control of wall street so again the arguments against the chinese when being the world reserve currency don't hold water the u.s. dollar using those very metrics looks like a pig dressed up with a bunch of lipstick and a pig wearing lipstick you know the dollar is really the. the leper with the most fingers it's the prettiest horse at the glue factory you know it is just being held up with sticks and scotch tape and once it blows its load mount vesuvius gold skull raul kid while gold is already skyrocketing but again this is the global currency war we're moving on to another headline about another currency u.b.s. declares the euro should not exist and a monster report on the odds of an e.u.
breakup this is u.b.s. is stiff and dio paul donovan and larry hathaway and they released a report which they examined what would happen if the euro broke up so the consequences of a weak country left the eurozone so like italy or greece or portugal or spain they would it would result in their khana me of a up to fifty percent g.d.p. collapse in the first year but then they go on to say if germany left it would result in a twenty to twenty five percent collapse in their g.d.p. it would also cause of global trade to collapse u.b.s. is in the business of churning people's accounts on mercifully to make u.b.s. brokers and bankers money every day they come out with a news story and it's usually a contradiction of the previous day's story if you listen to u.b.s. or in these other bankers you're going to lose everything because there are there are fraud they're complete fraud and they've been shown to be fraudulent nineteen different ways to sunday and that's not going to change their business model is
fraud all these banks same thing so speaking of varying cost for bailing out systems or bailing out people let's turn to the u.k. max because i have these two headlines here interesting contrast england riots to cost taxpayers at least one hundred thirty three million in policing and compensation so this is in the u.k. and the the rioting cost one hundred thirty three million pounds people are out in arms about this but if you contrast that to the head. line u.k. financial bailout reaches one point four trillion pounds this is from april of two thousand and nine and the cost of the banking balance was one point four trillion but contrast the response from the population in the u.k. to the one hundred thirty three million cost of the rioters compared to the banking rioters well in the u.k. the problem is then you see this all over the world victims are very reticent about
talking about their experience in a ponzi scheme this is what police find often that they'll approach the victim of a ponzi scheme to tell them that they are a victim of a ponzi scheme and they always deny it they deny it so this u.k. person the subject of the crown i was going to say citizen for a second. you know they would be upset that a stick of gum was stolen and they'll call the police hopefully the stick of gum was stolen but if they have their entire mortgage defrauded their house lost due to george osborne's friends in the city they're quite embarrassed and ashamed about it and they won't want to tell anyone or lose face with their neighbors and people in the banks know this this is why they they know that they're not going to be prosecuted or caught by committing and u.b.s. and the others defrauding millions out of trillions and the other thing is that remember when all these riots were going on in the u.k. the media was certain that they were all gang members well actual analysis of the people arrested in jail is less than twenty percent of them were gang members and yet contrast that again with the banking riots one hundred percent of them are
proven to be part of a racket a global fraudulent debt racket that's why i say give these riders brokers licenses you can grow your economy by leveraging genuinely talented people who know how to rape and plunder u.k. . it can make a show a channel for rape and plunder in the city by rioting looters want to be better all right stacy ever thanks so much thank you max don't go away much more coming your way stay right there. the terrorist attacks that became synonymous with. the senseless slaughter of almost three people stunned the world. the vision of a. news on t.v. remember. to. look back at nine eleven
now see. worldwide manhunt for him lasted for fifteen years. one million euro award was promised for his country. political murder for the west. in. general and the serbian army. i am asked asriel welcome back to the kaiser report this is the book you've got to get it's called debt the first five thousand years all right let's talk to the author david graber welcome to the kinds of report thanks great to be here all
right david graver which came first the debt or money and how do you define the two well if you define money really broadly i suppose in a certain sense it's always been around as one of those things that you know wasn't really invented at all anymore than say music or clothing is you know money is just a. way of saying twelve of these are worth two of those it's a way of measuring proportional values i guess you could say dead on the other hand is when you take a promise and turn it into money when you take a promise second be precisely quantified and because it can be turned into money turned into mathematics you can transfer it from one person to another normally if i make a promise to someone else i can't actually you know you can't sell my promise to a third party that's what makes debt so special it's impersonal it's detached from any actual human relations so in that sense money had to come first but the odd thing is that we're used to thing the money is coins and that didn't come first at all in fact cash isn't really
a late comer money actually originally took the form of credit and debt ok. you're saying money you used the term proportional value or i guess you could say barter there is a bit of a barter element there versus debt which is the beginning of what we now call derivatives it's a representation of something that you can buy and sell independent of any underlying value it has it's own separate kind of parallel universe if you will in the a in the scheme of economics correct in a sense although you've got to be careful with the term border because we're all taught that you know first once upon a time there was border and then you get money and after that we get credit but actually that story is if anything backwards there's no example of an economy where people sat around and saying well tell you what i'll give you twenty chickens for that cow actually you know people do each other favors you know we're in a real society about money the way anthropologist such as me is observed what
people do is they say you know wow that's a really nice pig and then you say oh no i'll give you the pig don't worry it's on me it's a present and then of course you owe somebody some. you know you all my favor the question is how do you go from the communities where everybody knows each other favors which is true the way communities are supposed to work is something we. it's a you know you will me exactly twenty seven of these thirty two of those and that does not seem to happen to border that seems to happen to legal systems through temple redistribution a million different ways but the story the economists tell us is clearly not it so for the past five thousand years we have moved back and forth between this virtual money or debt based system as we have today and or as we had at the beginning and hard money it can be like gold and silver so what's the difference between these two periods and how do they ebb and flow through history how do we make the transition from back and forth well that's a really interesting thing and i didn't really anticipate it when i started my
research what i found out as least if you look at the history of everywhere from europe to asia. there is a kind of a shape to history an ebb and flow of credit money is the original form of money you already have expense accounts bar tabs fluctuating interest rates. compounded interest rates you know long before the invention of coins then around seven hundred six fifty eighty you skip the simultaneous invention of coinage in india in china and first of all in the training and now the maison thing is that this isn't really an economic innovation the phoenicians for example or the great traders of antiquity didn't even use coins and told very late it was mostly to pay soldiers and actual cash makes sense if you think about it because if you have a bunch of marauding people stealing gold and silver of what's going to carry off you know you kind of move to cash system of soldiers the last person you're going to want to extend credit to if you're selling things and in periods of war empire
and slavery you move to cash money. for about a thousand years that was the case from a b five hundred b c two five hundred eighty. was a period of giant empires that empires use cash to pay their soldiers when the empires go away in the middle ages so does. cash it all gets locked up in temples and people go back to credit systems again we're used to thinking oh they reverted to barter no it's not true at all across from europe to china people were using complex credit systems which were denominated in money that no longer actually existed physically most of the time. so you have paper money you have checks you have tally sticks are using in england then of course one thousand nine hundred two you get all the gold and silver coming from the americas people move back to cash you actually have the reappearance of huge empires slavery that's the period we're moving out of now since one thousand nine hundred seventy one if you just want to choose an arbitrary cut off date that's when nixon went off the gold standard in the dollar was definitively detached from gold so this is not
a new thing virtual money it's actually in a way reverting to the original form of money so how does the current era now so take us through walk us through what's happening now we are we're on it we're a transition period right now correct exactly and one of the things that i found most disturbing in research researching the book is that what we've been doing is going about things backwards if you look at the history of credit money starting in mesopotamia there was always some system in place to protect others and it makes sense because if you have virtual money if money is just an iou it's a promise an arrangement between people not intrinsically different than in any other promise you might make well the problem is first of all how do you make sure things don't go completely out of hand and people to start making crazy promises they can't keep and to how do you make sure that essentially most people don't end up becoming literally or figuratively slaves to the people with the money. that was the great social crisis of antiquity it was always the fear of
a debt trap poor people would fall in to listen debt to those people who actually had the money they would end up having to sell off their lands or flocks eventually going to wives and children themselves into slavery or debt peonage so that the risk. normally to put in some kind of mechanism a failsafe in tamia kings would simply declare a clean slate all debts are cancelled the biblical jew believe course every seven to forty nine years there is cancellations now. so usually silver debt which was commercial debt was left alone but consumer debt was way down on everybody to start over again and the middle ages had a different tack they mostly had usury laws so lending money at interest was illegal also debt peonage itself so there's always some kind of mechanism to protect debtors now what happens this time. the first thing they do they get rid of the usury laws they create institutions like the i.m.f.
or adopt institutions like the i.m.f. as a sort of global debt in force or other ones like the s. and p. you have this giant global bureaucracy essentially financial bureaucracy which is dedicated to the principle that no one can ever default. this is crazy i mean not only economically is it crazy but it's doing exactly the opposite of what people have historically done and if you look at the results well it looks an awful lot like that terrible death trap that everybody was afraid of throughout human history so if i hear you correctly you're saying that for the first time in five thousand year history of debt in credit we're in an era now where institutional a creditor is protected versus the debtor exactly in fact they've made bankruptcy laws more difficult they've made lending at interest easier you know the usury laws that we did have were essentially abolished in the beginning of the eighty's here in america and similar things happened all over the world suddenly you move from the sort of welfare state model where people from that
social benefits this idea where it well you can get credit credits to save the world everyone has for a one k. the one whose mortgages the poor in the third world are going to be saved by micro credit. meanwhile the terms of the credit are skewed usually in favor of the creditors over the debtors now. the result is you know most americans i always like to make this point you know we're in a position which looks a lot like that social disaster that everybody was afraid of if aristotle were here today he would think the distinction between someone falling into debt and selling their children into slavery and someone in debt renting themselves and their family into going to work for somebody else would be probably illegal istic distinction. now on the other hand i think there is reason to hope because well i mean we're talking five hundred year cycles here forty years is nothing i mean maybe they got it wrong the first round but there's a lot of room to fix things up ok well in this area of subject of hope i was just
looking on the web and stumbled upon a story about kiva dot org which is a peer to peer lending site and over three hundred fifty thousand individuals in the first world loaned money to three hundred fifty thousand people in the third world micro loans. exactly what you're saying was going on five thousand years ago they've extended credit. terms that are reasonable and they have boosted the economy in huge ways so i mean that's a hopeful sign i suppose you could say if that model could be embraced on a slightly larger scale correct absolutely i mean is a million solutions i mean one thing the world doesn't lack is smart people if we put our minds to this it would be very easy to come up with alternative money systems alternative ways to arrange these things i have friends in asheville who set up a alternative money systems with software that sort of anybody can use and they've
got thousands of people already hooked in who hardly use cash at all and there are many more they simply stations directly with each other and there's a million ways to do it and the other thing is the political mobilization visit a real problem isn't that the lack of alternatives the real problem is the fact that anything is going to be cut off politically and that's why i think what's happening in europe is very hopeful and we have in greece what we have in spain and it's beginning to spread to other countries and the way i like to think of it is i think in two thousand and eight they kind of let the cat out of the back you know for all these years i'm saying markets run themselves the people in charge they know what they're doing they may not be very nice people but they're incredibly competent in fact they're the only people who run the khana me and of course we're also told debts are sacred and have to be repaid what we learned with the crash was that none of those things were true people had no idea what they were doing they did get bailed out markets didn't run themselves so once we understand that money is actually a political arrangement it's a social set of promises that people make to one another well and you know if
trillions of dollars worth of debt can be made to disappear if that's convenient for the big players then what people are saying is well. over right fine if those are the new terms that make sense but if democracy is going to me mean anything now it means everybody gets to weigh in on how promises are made and how they're in the . she added and that's what people are calling for and demanding and i i think it's very promising and for a sort of new political movement actually one more question this is from twitter and if you want to ask questions on this show go to my twitter account at max kaiser and this is from redub people the question is are you arguing that money quote in a sense of exact equivalence and quote is based on coersion not voluntary exchange i think of that it originally emerged in that context and has been maintained remarkably much through that context if you look at you know where the first
circumstance where people started commuting values of figuring out the twenty seven of these equals three of those was mostly legal cases and situations of potential violence i think that coins have been promulgated through military systems and i think that. the current dollar system is closely tied i mean look at the international currency system the current the international currency is the currency of the largest military power that's that's not a coincidence all right david grammer we're going to have to stop there thanks so much for being on the kaiser report claims or having the pleasure the book is called debt the first five thousand years i recommend you pick it up that's going to do it for this edition of the kaiser report with me max kaiser and stacey armor our thank my guest david graber if you want to send me an e-mail please do so at kaiser report at r t t v dot are you until next time this is max guys are saying by all.
one of the most you get i saw there's ice hockey stadium becomes a place of mourning with a hundred thousand including prime minister vladimir putin paying tribute to the forty three victims of wednesday's plane crash which claimed the lives of most of the keystone. a nation on god's new security threats emerge on the eve of the tenth anniversary of the nine eleven attacks which unleashed they want to know right now is the it by itself to have been an even bigger threat to the world. and christendom brookie relations between israel and egypt about the strained as protesters stormed these radio embassy in cairo down the boxes and almost. to the. news from russia and iran the world this is all see with me here thanks for joining us the.